THE PROBLEM
Imagine a physician prescribing treatment for a diabetic based only on
a single blood-sugar test, or on the average blood-sugar level the
preceding year. Choosing a therapy on such limited information would
be foolhardy. Yet using only the most commonly cited estimate of 43.6
million uninsured Americans in 2002 misses the millions who move in
and out of coverage during the year.

The number and composition of
the uninsured changes dramatically if you look at the uninsured during
a particular month rather than over an entire year. Getting accurate
and timely estimates of how many people experience what kinds of spells
of uninsurance is important in order to craft effective policies for
the uninsured. Further, those uninsured all year differ from those
individuals who lose coverage for only part of the year.

A team of researchers
at the University of Michigan’s Economic Research Initiative on
the Uninsured (ERIU) has assembled Fast Facts on the Uninsured, a set
of statistics highlighting important differences contained in three key
data sources: the Current Population Survey (CPS), an annual data source
that interviews individuals about their health insurance once a year;
the Survey of Income and Program Participation (SIPP); and the Medical
Expenditure Panel Survey (MEPS). The latter two surveys interview people
about their coverage multiple times during a year.

POLICY PERSPECTIVE

“Many of us have become comfortable
thinking about “the uninsured” in
terms of the statistic reported by the
annual Current Population Survey—
43.6 million in 2002. Each year’s estimate
is an indicator of whether the
“problem of the uninsured” is increasing
or decreasing, and by how much.

The CPS number is a useful estimate
of year-to-year change, but masks key
information that can be of value to
those evaluating and designing policies
aimed at reducing the number of
uninsured individuals, leaving unanswered
questions such as: Who are
leaving the ranks of the uninsured in
a given year? Or, who are joining the
ranks of the uninsured? Answers may
indicate labor market changes or the
need for new interventions. We can
get answers to some of these questions
by examining SIPP and MEPS.

Our ability to predict the impact of
any change in the economy or in the
design or generosity of public programs
depends in part on our understanding
of who is without health
insurance for how long.”From Catherine McLaughlin,
Ph.D., Professor at the University of Michigan and Director of
ERIU

THE FACTS

The number of persons lacking coverage for some period during
a year is much larger than the number of uninsured at a particular
point-in-time. Roughly 64 million nonelderly Americans (26
percent of the nonelderly population) were uninsured for at least
part of 2001, according to MEPS and SIPP data. Because of survey
design, CPS cannot provide such estimates.

CPS estimates most closely match the point-in-time estimates
from SIPP and MEPS. While the March CPS is designed to measure the number
of Americans who
were without coverage for all of the previous
year, the CPS estimates that 40.9
million Americans under age 65 were
uninsured in 2001, nearly identical to the
point-in-time figure from SIPP of 41.4 million,
or the MEPS’ estimate of 44.8 million.

For some populations, the three measures of uninsurance tell
very different stories. Children, for example, experience
more transitions in and out of coverage during any given year than
do adults. Thus, children are more likely to be captured in a measure
counting individuals who are uninsured for part of a year. In contrast,
Hispanics, non-citizen immigrants, and the self-employed are all
more likely than average to be uninsured all year.

Q&A with Mary Harrington, ERIU

Mary Harrington,
a Research Investigator with ERIU and formerly with Mathematica Policy
Research,
Inc., has spent 14 years investigating different issues involving health
insurance coverage for low-income
populations. Harrington talks about the importance of researchers and
policymakers looking at other data
sources on the uninsured and not over-relying on the Current Population
Survey (CPS).

Q: What is the purpose of ERIU compiling Fast
Facts?

A: We’re trying to make
health policymakers and researchers with an interest in the uninsured
aware of how much difference it can make when you look at statistics
about the uninsured
from different data sources and at different points in time or
reference periods. Researchers
and policymakers can use the Fast Facts data to answer numerous
questions about the
magnitude, characteristics, and distribution of the uninsured
over different time frames
and data sources.

Q:Why is this important?

A: People who are uninsured for an entire year,
the chronically uninsured, are distinct from
those uninsured for some portion of the year. And the part-year
uninsured includes people
who cycle in and out of coverage as well as those who begin
or end a spell without coverage
during that year. Policies targeted to the chronically uninsured
are likely to differ from the
kinds of policies needed for those who change from one status
to another and experience a
brief period without insurance.

Q:What specifically
can MEPS and SIPP tell us that CPS can’t?

A: For some populations it doesn’t seem to matter which data source
you use, as you’re able
to tell a very similar story. But for certain groups, including children,
the self-employed,
Hispanics, and immigrants, it really does seem to make a difference
when you look at the
all-year vs. part-year distinctions. When looking at MEPS and SIPP
we see children are less
likely than average to experience a lack of coverage throughout the
entire year. Children are
more likely to be covered under public programs, and turnover is greater
in public programs
than it is in employment-based and other private coverage. Those are
the kinds of things you
can tease out.

Q:How could policies be more specifically targeted
to address the different types of uninsured?

A: A person who lacks insurance throughout the
year may very well benefit from policies that
would expand public coverage or make affordable employer-based
coverage available to
them. Whereas the people who are cycling in and out
of coverage during a year, and who
are experiencing periods of being uninsured, are
going to benefit from policies that would
allow them to keep insurance once they get it.

Q:What do we need to keep in mind when we read
about 43.6 million uninsured Americans?

A: We need to realize
the number of people who are uninsured is much larger than 43 million.
More than 60 million are uninsured at some time
during the year, and the number can be as
high as 80 million if you expand your view to
a period of two years. Uninsurance touches an awful lot of
people’s lives. This is not a uniformly
unemployed, low-income group of people. It’s
a very diverse population that includes working
families who are
middle-income and upper-income, as well as very
vulnerable families and adults. This is a dynamic
population and we can’t lose sight of that.
We need to start thinking about being uninsured
as periods
of uninsurance that people experience.

This Research
Highlight is the sixth in a series of research-based policy documents
that address
current questions and issues related to the health care coverage
debate. The next Research Highlight will examine the effect of
welfare
reform on immigrant coverage.
Research Highlights can be found on ERIUs website at .

Funded by The Robert Wood Johnson Foundation, ERIU is
a five-year program shedding new light on the causes and consequences
of lack of coverage, and the crucial role that health insurance plays
in
shaping the U.S. labor market. The Foundation does not endorse the findings
of this or other independent research projects.